Why Does India Stir Up A Wave In The National Cotton Market

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The international cotton market was allowed by the Indian government this year (Indian cotton year 2021.10-2022.9), and the news that domestic textile enterprises imported cotton duty-free before September 30 turned upside down. On April 18, the main contract of ice cotton futures in July soared to 143.34 cents / pound.

analysis:

First, the Indian government has not set a ceiling for the total cotton imports this year. Therefore, as long as there is a certain price difference between foreign cotton and domestic cotton prices, Indian mills and traders may sell global cotton resources;

Second, from the perspective of time, the foreign cotton that can be contracted by Indian enterprises from April to September is mainly Australian cotton, American cotton and West African cotton; In 2021 / 22, the shipping date of Brazilian cotton is concentrated in September / December, so there is little space for selection of aged cotton.

So what is the impact of India's duty-free import of foreign cotton on China's cotton textile and clothing industry?

The views of export-oriented enterprises can be summarized as follows:

First, the "upside down" of internal and external cotton yarn will gradually narrow, and the competitiveness of cotton yarn from India and Pakistan is expected to recover. With a large number of Indian mills signing contracts for low and medium quality American cotton, Australian cotton, West African cotton, etc., which may cause the domestic cotton price in India to hit the top and fall down, the cotton yarn cost has dropped significantly, so the cotton yarn FOB / CNF quotation is also "water consumption ship falling".

Second, India's cotton mills use a large number of imported cotton blended with cotton, and the indexes and stability of cotton yarn are expected to be improved, which may have an impact on the sales of 40s and above cotton yarn in China. Compared with Indian cotton, Australian cotton and American cotton have the advantages of high strength, less foreign fibers and high spinning rate, which are suitable for spinning medium and high count cotton yarn, and their substitutability for Chinese cotton textile and clothing continues to rise.

Third, a large number of low-cost foreign cotton has entered the Indian market, and the production, order receiving and export capacity of Indian cotton textile and garment enterprises will be rapidly adjusted and restored; In addition, the "order picking" policy in Europe and the United States, as well as the acceleration of labor policies in Europe and the United States, as well as the acceleration of labor policies in Europe and the United States.

It is understood that in view of the short-term cancellation of 11% tariff on imported cotton by the Indian government, and at present, China's domestic cotton supply is sufficient and the domestic and foreign cotton is greatly inverted, resulting in relatively weak and cold inquiry / purchase of foreign cotton ship cargo and bonded cotton, some international cotton merchants and trading enterprises plan to transfer ports to India, Pakistan, Vietnam and other countries to improve cotton sales The progress of fund withdrawal.